REC raises Rs 500 crore via tokenised bonds

The issuance carry a 7.30% coupon and mature in one year and nine months. It had a base size of Rs 100 crore and a greenshoe option of Rs 400 crore. The issue received an overwhelming market response from investors, clocking a book building of Rs 796 crore, the lender said in a release.

“The Demat 2.0 initiative and tokenisation of corporate bonds represent a landmark step in the evolution of India’s debt markets. By leveraging digital infrastructure, distributed ledger technology, and CBDC-enabled settlement while preserving existing investor protections and regulatory safeguards, SEBI is laying the foundation for the next generation of capital market infrastructure,” Rajesh Kumar, director (Finance), REC, said in the release.

This initiative is a joint effort by the Securitisation and Exchange Board of India, with the Reserve Bank of India also joining to develop the tokenisation process. Participation is currently limited to entities equipped with a central bank digital currency wallet and Demat 2.0 infrastructure.

Tokenisation involves converting a corporate bond into digital tokens representing fractional ownership of the instrument, reducing reliance on paper certificates and multiple intermediaries. Experts said the move could improve liquidity, reduce transaction costs and enable faster settlements.

With REC’s successful tokenised bond issuance demonstrating both operational feasibility and investor appetite, more issuers are likely to explore this route.

“This pilot represents the industry’s first credible test of tokenised bonds. REC’s successful issuance was a strong start, and it paves the way for more such issuances. For now, the initiative remains confined to an institutional pilot, but over time it is likely to be extended to retail investors,” said Mohit Gupta, co-founder, Equirize Securities.